G.R. No. 133608 ; August 26, 2008
TIONG ROSARIO, petitioner, vs. ALFONSO CO, respondent.

FACTS

Petitioner Tiong Rosario, proprietor of TR Mercantile, supplied paper products to Modern Paper Products, Inc. (MPPI), where respondent Alfonso Co was Chairman and President. As payment, respondent issued three checks, which were subsequently dishonored for payment stopped or insufficient funds. After a demand letter was ignored, petitioner filed a criminal complaint for violation of Batas Pambansa Blg. 22 (B.P. 22) against respondent. Prior to the filing of the criminal cases, however, MPPI and its principal stockholders had filed a Petition for Suspension of Payments for Rehabilitation with the Securities and Exchange Commission (SEC). The SEC issued an order creating a management committee and suspending all actions for claims against MPPI.
In the criminal cases before the Metropolitan Trial Court (MeTC), respondent filed a Motion to Suspend Proceedings, arguing that the SEC rehabilitation case presented a prejudicial question and that the SEC order mandated suspension of all claims. The MeTC denied the motion, finding no prejudicial question. On certiorari, the Regional Trial Court (RTC) reversed the MeTC and ordered the suspension of the criminal proceedings during the pendency of the SEC rehabilitation case. The RTC reasoned that from the time MPPI filed its petition, it was legally restricted from paying its obligations, and to hold respondent criminally liable would force him to pay the corporate debt personally.

ISSUE

Whether the pendency of a corporate rehabilitation proceeding under P.D. No. 902-A warrants the suspension of criminal proceedings for violation of B.P. 22 against a corporate officer who issued the dishonored checks in a corporate capacity.

RULING

The Supreme Court REVERSED the RTC Resolution and ordered the MeTC to proceed with the criminal cases. The legal logic is clear: a criminal action for violation of B.P. 22 is a public offense that prosecutes an act against the state, not a mere enforcement of a private collection suit. The offense is committed the moment a check is issued, knowing at the time of issue that there are insufficient funds, and the check is subsequently dishonored. The filing of a corporate rehabilitation petition does not extinguish this criminal liability. The suspension of claims under P.D. No. 902-A applies only to actions for the enforcement of monetary claims against the distressed corporation to aid its recovery. It does not encompass criminal prosecutions, which are intended to punish a wrong against the public order and are not claims for the payment of debt.
The Court emphasized that the purpose of B.P. 22 is to safeguard the integrity of banking and commercial transactions, and this public interest cannot be subordinated to private corporate rehabilitation. The respondent, as the drawer of the checks, is personally liable for the offense. The ruling in Santiago v. Garchitorena was cited, which held that criminal cases are not automatically suspended by rehabilitation proceedings. To hold otherwise would allow the corporate veil to be used as a shield from criminal prosecution, undermining the penal law. The policy of administrative agency expertise does not deprive regular courts of their constitutional duty to adjudicate criminal cases.